Gottschalk Technologies, Inc. is on the cusp of a transition.  I started GTi by focusing on generating revenue through hourly freelance software development and programming.  This was because I needed to raise some $ to pay for the start up costs and moving to a new city and develop a reliable base of income even if it’s modest.  However, from the outset my goal was never to build the business for the long term around that revenue source.  I’ve worked in that model in the past and found that it can be fun at times but can also be a real grind.  As a consultant I was always wondering where the next $ is going to come from and when when I’m on vacation there is no revenue at all.  None, nothing, nada.  So…

My intention has always been to use hourly consulting to provide a basis of cash flow while in parallel work on generating passive income sources.  Easier said than done.

This is something I’ve been thinking about and dabbling in for the last decade and I’ve found that it’s a surprisingly difficult transition to make.  I’ve learned that there are basically two ways to build passive income.

1. First is to make a big splash.  Invest a ton of time and money in a big idea, get angel and VC investors interested.  Cross your fingers and hope that your idea and ability to execute are solid enough and go for it.  This is the “all in” approach and has turned out many fantastic, world name brands and businesses.  But far more start-ups flame out this way.
2. The seocnd option is to bootstrap a business from the beginning.  Make it pay for itsself from day 1 (OK, maybe Day 2).  Find the simplest way to turn $1 into $1.0000001 and begin.  It doesn’t need to be any better than that.  Then figure out the next step to turn $1 into $1.0000002.  And repeat.  Bootstrapping a business can be gruling, slow and frustrating but you don’t have the same risk as with option 1.  I would guess that we don’t hear quite as much about these businesses in the popular press but they are the true engine of the economy.

I’m taking path number 2.  I don’t have the stomach for path 1.  I rebel against the external pressure that comes with option 1 and it’s not a pretty picture.  Even if it was all my own money that was on the line I’d still probably rebel from option 1.  It’s just not my thing.  Option 2 however, is just my speed.  I enjoy the long slow process.  For fun I sign up for endurance athletic events that can take up to a year to prepare for and then can feel like a grind on race day – but to me the process of planning, training, and executing is a total blast!  I enjoy the balancing act of figuring these long and slow thing out and seeing success on the other side.

I’ve been talking about this transition with a number of people but I don’t believe I’ve written about it yet.  So, here goes using baseball as an analogy to describe my entry into product development.

Step One – “Batting Practice”

Before I can expect to hit a curve ball, knuckle ball, or even a fast ball I need to spend some time taking batting practice.  In terms of product development this means that I need to go through the complete Product Development Cycle (PDC) from conceiving of a product, designing it, building it, launching it and following up to see how the process went – all for practice and expecting to make no money in the process (remember this is batting practice – you don’t get paid for that).  Fortunately, since this is batting practice some of the rules are a bit different.  Primarily I want to find ways to cut down on the time it takes to go through the PDC and focus on the steps that need the most practice.

Before moving on I need to define the following phases for PDC:

1. Setting Objectives – what am I trying to accomplish?
2. Defining Requirements – what am I trying to build?
3. Designing the product – what will it look like? how will it be built?
4. Implementation – build it.
5. Testing and Bug Fixing – does it work as intended?
6. Launch – get it out in the wild.
7. Review – how do people like it?  did I accomplish the goals?  what did I learn about steps 1-6?

There are a ton of ways to move through these 7 phases or break them into different phases. I don’t want to engage in a discussion of the best way to define the phases of the PDC or a detailed discussion of project management methodologies.  That would be a waste of time during Batting Practice.  But I think we can agree that one way or another these 7 things need to happen to a greater or lesser extent to make it through the PDC.

So, what I can cut down on in the list above, what should I focus on, and what should my goal and objectives be?

Objectives for Batting Practice:

• Launch a real product.
• Learn about legal, financial and administrative hurdles that must be crossed to take a concept to market.
• Learn how to develop using the iPhone API.
• Gather real world feedback from users.

I think that is a manageable set of goals for this round and if was to accomplish those I would call Batting Practice a success and would feel ready to move on to trying to scratch out a bloop single in a real game.  But if I fail to accomplish any of these objectives I might need to do another round of Batting Practice with a shift in focus.  I hope to avoid that.

Implications for Requirements

• Keep it as simple as possible – then simplify some more.
• Make sure I’m not infringing on any copyrights or patents.
• Engage users and potential customers early and often.

Implications for Design

• Keep it as simple as possible – then simplify some more.
• Don’t reinvent the wheel.  Use a game that already exists and everyone knows.
• Experiment with a wide variety of the iPhone User Interface capabilities.  But don’t obsess over them.
• Build feedback mechanisms into the game itself.

Implications for Testing

• Testing and ironing out all bugs.  The resulting product doesn’t need to be perfect.  But it should lock up a users iPhone and it shouldn’t be a pile of s**t.

Implications for Launch

• Get to market as soon as possible.
• Remove anything delay possible.
• Simplify, Simplify, Simplify

Implications for Review

• Be generous with time and attention during this phase.  This is where the learning happens.

Next Post: I’ve picked a game!